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Mumbai, Nov 17 (IANS) The Enforcement Directorate (ED), Mumbai zonal office, has initiated the process for restoration of three immovable properties worth Rs 55.85 crore seized in the Rs 694 crore bank loan fraud case involving Varon Aluminum Company. An official gave this information on Monday.
These properties were provisionally attached by the ED under Section 5 of the Prevention of Money Laundering Act (PMLA) because Varon Aluminum Pvt Ltd and other group companies/individuals had committed fraud and siphoned off bank funds for their personal gains, the official said in a statement.
Citing the State Bank of India report, the ED said the value of the property is based on the exercise conducted in 2021.
ED initiated the investigation on the basis of FIR lodged by CBI against Varon Aluminum and others for defrauding Bank of India and State Bank of India to the tune of Rs 293.74 crore and Rs 401.25 crore respectively.
In its charge sheet it was alleged that a manual letter of credit of Rs 300 crore was issued by Canara Bank on behalf of VAPL in favor of its group company VACPL, and the same was encashed by Bank of India on the basis of fake documents without proper verification.
ED investigation revealed that each Letter of Credit was paid by opening a fresh Letter of Credit in favor of VAPL, VIPL and other shell entities, and the said procedure was followed since the opening of the first Letter of Credit.
The ED said the credit was taken cyclically to repay old loans, reduce cash credit liabilities taken by VAPL and group companies from other banks and shore up the books of accounts.
During the investigation, the ED identified Proceeds of Crime (POC) and issued two attachment orders for attachment of immovable properties totaling Rs 179.27 crore.
The provision of Section 8(8) of PMLA mandates return of attached/confiscated assets to the rightful owners/legitimate claimants and victims of money laundering.
Seized property should be used for the purpose of restitution of property to the rightful owners when it is determined that the property was acquired through illegal means but legally belongs to innocent parties.
ED is making sustained efforts for restitution of assets to the rightful owners/legitimate claimants and victims of money laundering and encourages all affected parties including banks and other financial institutions to utilize the provision of section 8(8) of PMLA for restoration of assets attached/seized by ED and restoration of their claim in respect of such assets.
Due to the sustained efforts made by ED for restoration of claims of legitimate claimants, SBI filed a miscellaneous application in the special court under section 8(8) of PMLA to claim three attached properties worth Rs 55.85 crore as per the assessment done in the year 2021.
In pursuance of the above objectives, during the court proceedings, the ED filed an affidavit before the Special PMLA Court, Mumbai, expressing its willingness for restitution of the attached properties claimed by SBI through its miscellaneous application.
The special court PMLA, vide order dated September 26, has accepted SBI’s application and ordered restoration of three immovable properties worth Rs 55.85 crore to it.
–IANS
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